Chinese electronics and home appliances retailer Gome has announced that its board of directors has decided to sue its former executive director Huang Guangyu.

As part of this initiative, the company requires Huang to compensate losses caused by his irregular activities in the repurchase of shares of Gome at the beginning of 2008.

According to a statement published by Gome, in regards to Huang's violating of the trust obligation as a director in January and February 2008, the company has formally brought a lawsuit against him in Hong Kong, where the company was listed. The company will pursue the recovery of losses caused by Huang's irregular activities, even though he is currently in prison.

Gome also revealed in the statement that the company previously received a letter from a company named Shinning Crown, which is owned by Huang. The letter raised five requests, including removing Chen Xiao from his positions of chairman and executive director of Gome and removing Sun Yiding from the position of executive director of Gome. The letter attributed the performance decline of Gome over the past year to the poor management of the board of directors led by Chen.

However, Gome said the requests in the letter have no basis and the company firmly opposes the decommissions of Chen or Sun.

Chen was appointed acting chairman of Gome on November 27, 2008, after the company's former chairman Huang was investigated for economic crimes and was taken away by Beijing police. Chen formally took over the position of chairman of Gome on January 16, 2009.

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